NRI - Investment advise for 5 years

Q & A Forum › Category: Financial Planning › NRI – Investment advise for 5 years

laxminarayan asked 8 years ago

Hi Sreekanth, Firstly I want to thank you for the kind of support you provide and also being un-biased in all topics. I actively follow you on social media channels which gives me the latest financial info concerning the common man like me. Need suggestion on creating a new Portfolio. I moved in to Abroad recently (JAN 2018) and plan to stay for a period of approx 5 years. My financial goal :

To invest in house on return to India after 5 years. (Approx 80Lakhs).
Unplanned (maybe also parental goals in future.)

I have a horizon to save upto Rs 40K/month (after all other expenses like indian health insurnace, parental insurance, emergency fund plan). So no other commitments in India Age : 30, (married and wife is house maker) Wish is to have a diversified fund with higher risk/returns (since I am confident India is in a very good suited path for growth and development sector in the next 5 years) Can you suggest me 5 MF SIPs which I can invest in? how is your review on following portfolio Large caps: Franklin India High Growth Companies fund (15K) Small Cap: L & T Emerging Business Fund (15K) Balanced Fund : BOI AXA Mid Cap (15K) Any other that you suggest for (10 to 15K)? or total 4 different MFs are also helpful as I am new to this domain. Lastly, coming back to my goal is not exactly 5year tenure. Once I move to India I could like to continue in the above MFs or should I stop them since my resident status would change? If its feasible I would like to continue in some of the above MFs for longer term (10 + years). Other suggestion needed on the platform: I tried to connect directly to In-House firms to invest directly but many of them refused saying I cannot do a online MF since I am a NRI (example: Franklin Tem, etc). So the question is if platforms like GROWW.in are really helpful? As I understand from your blog "Direct Plans" , usually that there is bigger expense Ratio in such platforms from where they get their bread-money. Is this true? which are the platforms a NRI can perform his MFs? Thank you again, Laxminarayan

2 Answers

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Sreekanth Staff answered 8 years ago

Dear Laxminarayan, Thank you for following my blog posts and your appreciation! Good to know that you believe in India's growth story! 1 - Do you have adequate Life insurance cover? 2 - Have you already investing in the above quoted 3 MF schemes? 3 - As of now, you can be a Resident Indian, once your become an NRI, you may not be eligible to invest in all MF schemes (assuming your are residing in the USA). But, some fund houses offer schemes for NRIs as well. Once you return to India, you can still continue (if required) in these schemes, only thing is you need to update your Residential status with the fund houses. Kindly read : https://www.relakhs.com/residential-status-calculator-nri-taxation/ https://www.relakhs.com/fatca-compliance-requirements-impact-mutual-fund-investments/ 4 - Direct plans generally have lower Expense ration than Regular plans. Direct plans platforms do not get any commission from Fund houses instead they may charge platform subscription fee from Direct MF clients. Off-late, quite a few new portals have been launched through which you can buy Direct Plans. Below are some of them;

Invezta.com
Orowealth.com
Bharosaclub.com
Mymoneysage.in
Groww
Jama.co.in
Unovest.co etc.,

Here is a list of fund houses in India that allow NRIs to invest in their mutual funds (country wise) @ http://support.tradeplusonline.com/support/solutions/articles/1000258562-nri-mutual-fund-investments

laxminarayan replied 8 years ago

Thank you,
1) No I’m residing in GERMANY. hope it’s better than the US for the investments in MF.
2) No, I haven’t invested on life insurance cover for myself, I’m planning to have one but haven’t bought one yet.
3) No, I just did my research on the MF market schemes but I haven’t started investing in any of above mentioned MFs yet, (have few FDs back in India).

Could you suggest about the 4 MF schemes I mentioned above, or give your own preference for me.

Thanks and Regards,
Laxminarayan

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Sreekanth Staff answered 8 years ago

Dear Laxminarayan, 1 - Yes. Kindly refer to this link @ Here is a list of fund houses in India that allow NRIs to invest in their mutual funds (country wise) @
http://support.tradeplusonline.com/support/solutions/articles/1000258562-nri-mutual-fund-investments 2 - Suggest you to kindly get an adequate life cover as you have dependents, through a Term life insurance plan. Kindly read : https://www.relakhs.com/insurance-importance-life-health-accident-covers/ https://www.relakhs.com/best-online-term-insurance-plans-india/ https://www.relakhs.com/term-insurance-plan-a-waste-of-money/ 3 - Considering your profile and investment horizon, you may consider below options ; Diversified Equity : Birla Equity / Franklin Prima plus Balanced Funds : HDFC Balanced fund Mid-cap : Franklin Prima / HDFC Mid-cap opportunities fund Large cap : Birla Frontline Equity / SBI Bluechip etc., Related Articles : https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/ https://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/

laxminarayan replied 8 years ago

Thank you, I shall proceed with your suggestions.
Regarding Franklin India High Growth Companies fund, it showed an impressive diversified range of companies they have invested in. What are your suggestions on it?
Secondly with a mid risk factor, BOI AXA notched some good returns for a short to mid term. Any thoughts on this?

Sreekanth Staff replied 8 years ago

Hi,
There are 10s of good Equity schemes. One of it is definitely Franklin HGC fund. You may consider it.
Kindly go through the above two articles, can be useful to compare and shortlist funds from same fund category.

BOI Axa fund was launched in 2016, relatively new scheme under Hybrid equity oriented schemes, given a choice I would put my money in a fund which has a long track record. For ex : HDFC Balanced fund under this hybrid – Equity category.